Ian King

Business Presenter

Jeremy Corbyn's attempt to highlight overcrowding on Britain's trains has turned into a mess after his claim that he was forced to sit on the floor during a three-hour rail journey was disputed by Virgin Trains.

But what about the issue that the Labour leader was trying to highlight - namely his call for the railways to be renationalised?

Firstly, it is important to point out that the railways have already been renationalised, in part.

Network Rail, which owns the stations, tracks, bridges, tunnels and rail infrastructure, is already publicly owned after the last Labour government forced its privately-owned predecessor, Railtrack, into administration in 2001.

Many people assume that the state has always owned the UK's rail infrastructure but in fact it has spent most of its history in private hands.

Video:Corbyn Calls For Railways To Be Nationalised

The network was built by private companies in the 19th century and early 20th century and was only nationalised when, in 1947, the post-war Labour government slammed the Southern Railway, the London, Midland and Scottish Railway, the Great Western Railway and the London and North Eastern Railway into British Railways.

Some 49 years later, John Major's Conservatives broke up what was by now known as British Rail.

That is the network: the train operators themselves remain, some 20 years after privatisation, in private hands and it is these businesses that Mr Corbyn would like to see nationalised.

The main argument for renationalisation is to reunite the rail network with the trains running on it under a common owner.

An integrated network, it is argued would save money and, with all profits being retained by the taxpayer instead of being distributed to shareholders, would mean all profits made on the railways could be reinvested in the railways.

This, it is claimed, could be used to cut fares and, over time, reduce public subsidies.

Yet there are issues with this. The first is that taking these businesses away from their existing owners would require compensation to be paid. This would run into billions of pounds.

Supporters of nationalisation argue that an alternative would be to wait until existing rail franchises expire and then take them into public ownership.

The model for this would be how the state took control of the old east coast mainline service in 2009 after the previous franchise holder, National Express, proved unable to meet the financial obligations that went with it.

The state-backed business that picked up the franchise, Directly Operated Railways, returned hundreds of millions of pounds to the Treasury during the five years in which it ran the service.

However, critics of this model, such as Patrick McLoughlin, the former secretary of state for transport, have pointed out that, during its time in public ownership, the east coast mainline service was using older rolling stock than on the privately-owned west coast mainline.

Provision for new trains was only possible after the franchise returned to a private operator.

Another objection to nationalisation is that, even if all profits made on the railways were reinvested in the railways, it would still require subsidy from the taxpayer.

Video:Clarke On Renationalising Railways

Britain's railways have never covered their costs since nationalisation in 1947 although they are close to doing so now and the subsidy from taxpayers is now lower than at any time since privatisation. There is also an issue with taxpayers subsidising rail fares at all.

Successive governments since privatisation, both Labour and Conservative, have attempted to reduce the subsidy from taxpayers to rail passengers and get the latter to contribute a greater proportion of their rail travel.

In some ways, this actually benefits Labour's traditional supporters in the North of England and acts against the traditional supporter base of the Conservatives in the South of England, because the vast majority of rail journeys taken every day are by people coming into London.

Some Labour voters in the North of England might question why their taxes should be used to subsidise cheaper rail fares for well-heeled folk commuting into the City from the Home Counties.

Other arguments against renationalisation include the fact that, although it took many years to be established, there is now competition on some lines - and that is raising standards and exerting downward pressure on fares.

A good example is Grand Central Trains, which runs trains between Yorkshire and the North East of England and London in competition with Virgin Trains on the east coast main line.

Another would be the short-lived but popular Wrexham and Shropshire Railway, run by Germany's Deutsche Bahn, connecting the Welsh Marches with London Marylebone.

Its creation in 2008 prompted Arriva Trains Wales and Virgin Trains to launch rival services into the region, serving it better, within months.

Perhaps the biggest objection to nationalisation - although barely anyone under the age of 35 will remember this - is that, no matter how poor the modern rail service appears at times, it is still immeasurably better than the old British Rail, notorious for its filthy, elderly and late-running trains and for its lousy catering service.

Service standards have improved, as has punctuality, while privatisation enabled newer rolling stock to be bought.

The number of rail journeys has doubled - although supporters of renationalisation argue this is due to population increases - while, perhaps most important of all, Britain's railways are safer than ever.

And, thrillingly, the renaissance of rail travel has even enabled some stations and lines closed back in the 1960s by British Rail under the notorious 'Beeching Cuts' to be re-opened, such as the long-defunct Stirling-Alloa line in eastern Scotland, the Vale of Glamorgan line in south Wales and the Eastleigh to Romsey line in Hampshire, with more re-openings planned.

It is questionable whether at least some of these achievements would have been made without privatisation.